Pension Results - 2019

16-Sep-2019

The financial year to 30 June 2019 was a challenging and volatile period for investors against the backdrop of trade war tension and slowing global growth. Despite the volatility, markets were generally positive for the year ending 30 June. This has allowed the All Growth option to achieve a return of 8.0% return for members, while the Balanced and Conservative options have managed to deliver returns of 7.6% and 6.7% respectively for the period.

Investment markets began the financial year positively. US stocks hit an all-time high while managing to shrug off concerns that the US Federal Reserve (the Fed) would precipitate a recession by increasing interest rates too quickly, ongoing US-China trade tensions and renewed economic and political uncertainty in emerging markets. Amid heightened geopolitical risks, softer European and Chinese economic data and renewed fears of a global slowdown, equity market volatility returned towards the end of 2018 as shares took a dive and growth assets significantly underperformed their defensive counterparts (such as bonds and cash). 

Despite this, some significant action took place early in 2019 that reversed much of the December downturn. Shares rallied in the beginning of 2019, supported by central bank monetary policies becoming more expansionary. For example, the Fed paused its program of interest rate increases and Chinese authorities announced stronger-than-expected stimulus measures. More recently, our own Reserve Bank of Australia has become more stimulatory and cut interest rates in June 2019 and again in July. While concerns remain over trade war uncertainty and weakness in global macroeconomic data, this global shift in monetary policy has helped to push equity and fixed income markets higher. 

VISSF continues to meet investment objectives and maximise returns relative to inflation, as measured by the Consumer Price Index (CPI), with our diversified Pension options outperforming their CPI relative investment objectives across all periods to 30 June 2019. 

See the table below for investment return details. 

Account Based Pension
Year ended 30 June 3 year compound 5 year compound 7 year compound 10 year compound
One year % average % p.a. average % p.a. average % p.a. average % p.a.
All Growth 8.0
12.9
10.2
13.6
11.6
Objective (CPI + 3.5%) 5.1
5.4
5.1 5.4 5.6
Outperformance 2.9
7.5
5.1 8.2 6.0
Balanced 7.6
10.4 8.7 11.4
10.4
Objective (CPI + 3.0%) 4.6
4.9 4.6 4.9 5.1
Outperformance 3.0
5.5 4.1 6.5 5.3
Conservative 6.7
6.7
6.3
7.6 7.9
Objective (CPI + 1.5%) 3.1
3.4 3.1 3.4 3.6
Outperformance 3.6
3.3 3.2 4.2 4.3
Cash 1.7 1.7 1.9
2.1
2.7
Objective (Bloomberg AusBond Bank Bill Index) after fees 1.8
1.7 1.9 2.2 2.8
Outperformance -0.1
0.0 0.0 -0.1 -0.1
Inflation CPI 1.6
1.9 1.6 1.9 2.1

TTR Pension
Year ended 30 June 3 year compound 5 year compound 7 year compound 10 year compound
One year % average % p.a. average % p.a. average % p.a. average % p.a.
All Growth 6.7
11.9
9.6
13.2
11.3
Objective (CPI + 3.5%) 5.1
5.4 5.1 5.4 5.6
Outperformance 1.6
6.5 4.5 7.8 5.7
Balanced 6.4
9.6 8.2 11.0 10.2
Objective (CPI + 3.0%) 4.6
4.9 4.6 4.9 5.1
Outperformance 1.8
4.7 3.6 6.1 5.1
Conservative 5.7
6.1 5.9 7.3 7.8
Objective (CPI + 1.5%) 3.1
3.4 3.1 3.4 3.6
Outperformance 2.6
2.7 2.8 3.9 4.2
Cash 1.5
1.5 1.8 2.0 2.7
Objective (Bloomberg AusBond Bank Bill Index) after fees 1.8
1.7 1.9 2.2 2.8
Outperformance -0.3
-0.2 -0.1 -0.2 -0.1
Inflation CPI 1.6
1.9 1.6 1.9 2.1
Chant West Super 2018 Pension 2018

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